HC Deb 19 February 1987 vol 110 cc748-50W
Mr. Meadowcroft

asked the Secretary of State for Trade and Industry what consideration he has given to the implications for United Kingdom responsibilities under European Community law of proposals for United States investigations to conduct internal audits of United Kingdom high technology companies for examining compliance with United States re-export controls; and if he will make a statement.

Mr. Alan Clark

I do not consider that there are any such implications.

Mr. Meadowcroft

asked the Secretary of State for Trade and Industry if he will list the audit requirements of the United States inspectors he now proposes to admit to the United Kingdom to examine the books of United Kingdom computer companies; and if he will make a statement.

Mr. Alan Clark

The United States authorities have requested that United States officials should be allowed to check the procedures which United Kingdom firms choosing to use the distribution licence system agree to put in place under it.

Mr. Meadowcroft

asked the Secretary of State for Trade and Industry what representations he has received from the United Kingdom audit profession in relation to the United States-sponsored internal control programme for high technology companies in the United Kingdom; and if he will make a statement.

Mr. Alan Clark

None.

Mr. Meadowcroft

asked the Secretary of State for Trade and Industry what steps he has taken to ensure that United States investigators conducting internal audits of United Kingdom defence contractors in the high technology field are not given access to information whose disclosure would prejudice national security or breach commerical confidentiality.

Mr. Alan Clark

Any visit, if allowed, would take place only on conditions which safeguarded national security and commercial confidentiality.

Mr. Meadowcroft

asked the Secretary of State for Trade and Industry under what circumstances he is prepared to allow United States auditors to examine the accounts of British high technology companies in order to investigate compliance with United States re-export controls.

Mr. Channon

The Government have made clear their rejection of extra-territorial re-export controls on many occasions. We also reject the principle of audit visits designed to monitor compliance with such controls, since any controlled goods imported into this country are subject to our own stringent export licensing requirements.

A number of interested trade associations have made it clear that some of their members see advantage in approved foreign consignee status under the distribution licence system, and would not wish the Government to take any action which would deny them those benefits. Even so, I shall not normally allow audit visits except where I am satisfied that a company wishes to maintain approved foreign consignee status and does not therefore wish the Government to reject an application for a visit.

In such cases, a number of further restrictions would apply. Where United Kingdom companies refuse visits they should not, on that account, be subject to penalties other than the loss of approved consignee status under the scheme. No information gained as a result of a visit should be used as the basis for United States proceedings or administrative action in relation to activities carried on in the United Kingdom. Finally, all visits would be governed by the guidelines already applicable to the conduct of foreign officials while in this country. In any case, I would not expect more than a handful of visits a year.

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